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Apple and IBM forge app alliance

If the partnership works, IBM and Apple could redraw the enterprise competitive landscape, writes Larry Walsh

The walls between Apple and IBM are crumbling. Enterprise IT giant IBM and consumer darling Apple announced a strategic partnership to collaborate on enterprise mobility solutions that will bring the power of Big Data to iPhones and iPads.

Through an exclusive strategic partnership, IBM and Apple will collaborate to develop enterprise mobility solutions. IBM plans to bring to market more than 100 vertical applications developed exclusively for iPhones and iPads, cloud services built around IBM's cloud infrastructure tailored for the iOS platform; new security, management and analytics tools, AppleCare support for enterprise implementations, and Apple device sales and contract activations.

IBM chief executive Ginni Rometty said: "This alliance with Apple will build on our momentum in bringing these innovations to our clients globally, and leverages IBM's leadership in analytics, cloud, software and services. We are delighted to be teaming with Apple, whose innovations have transformed our lives in ways we take for granted, but can't imagine living without. Our alliance will bring the same kind of transformation to the way people work, industries operate and companies perform."

The marriage of these two titans come at a time when each is looking for a new act to re-energise their good fortunes.

While IBM has been pressing its MobileFirst strategy for two years, it only achieved marginal success. Big Blue's cloud strategy and business is taking off, but it took the $2bn acquisition of SoftLayer and another $1bn expansion to build momentum. And while cloud is now a $3bn business, it's only a fraction of the $100bn total revenue stream.

Worse, IBM's hardware business is under pressure. Commoditisation, foreign retraction - particularly in China - and slack market demand is dragging down hardware sales and profitability. It's the reason IBM is selling off its x86 server business to Lenovo. Overall, IBM's gross revenues fell 3.9 per cent in the first quarter of 2014.

While Apple remains one of the largest and most profitable tech companies in the business, questions have lingered about its long-term viability since the 2011 death of founder Steve Jobs. With first-mover advantage gone in smartphone and tablets, Apple has been besieged by questions about it will maintain growth and profitability. Smartwatches just don't seem to have the cachet to excite investors, analysts and would-be consumers.

Apple has almost universally rejected the enterprise, despite the popularity of its products among business users. Apple avoids talk about B2B sales, and keeps a cloistered channel. Nevertheless, loyal users and devotes dragged Apple's MacBooks, iPhones and iPads into the workplace.

By forming a strategic partnership with IBM, Apple is essentially signaling a second act in the enterprise. Whereas Apple conquered the consumer market with its mobile devices, it now looks to Big Blue to help bring it into corporate environments as a viable enterprise platform.

"iPhone and iPad are the best mobile devices in the world and have transformed the way people work with over 98 percent of the Fortune 500 and over 92 percent of the Global 500 using iOS devices in their business today," said Apple chief executive Tim Cook . "For the first time ever, we're putting IBM's renowned big data analytics at iOS users' fingertips, which opens up a large market opportunity for Apple. This is a radical step for enterprise and something that only Apple and IBM can deliver."

How IBM's sprawling network of solution providers, integrators and consulting partners will play in the Apple collaboration is unclear. IBM did not respond to requests for clarification. In the announcement, IBM makes several references to part of its value in the Apple partnership is its community of partners.

Cook's own comments lend credence the Apple is looking to IBM to open its channel to expand sales coverage and open the enterprise and midmarket for its products.

The significance of the alliance could be profound. Apple is facing increased pressure by rivals Samsung, Lenovo and Google. Microsoft is trying to contain Apple and Google on multiple technology fronts. And IBM is looking for new market opportunities, particularly in relation to Big Data and mobility. If the partnership works, IBM and Apple could redraw the enterprise competitive landscape.